CMU professor sees enough positives, forecasts continued growth for Mesa County in 2025

By ​​Tim Harty, The Business Times

As the data compiler and writer of the Mesa County Economic Update quarterly newsletter, Nathan Perry sees the pertinent numbers that show where Mesa County’s economy has been.

The data serve as a factual, historical record. This time of year, though, the numbers serve another purpose, an inexact, speculative one: They are used to forecast what may be coming next.

Perry, a professor of economics at Colorado Mesa University, analyzed the data, a combination of numbers from 2023 and 2024, and drew his conclusions about what Mesa County is likely to see in 2025.

He saw positive indicators, such as the recently released 2023 Gross Domestic Product increasing 2.64 percent in Mesa County. And he saw negative indicators, a rise in unemployment chief among them. And on the whole he’s of the mind Mesa County will follow the national trend and have continued growth.

His first word choice to describe that growth was “subdued,” but upon further review he changed it to “reasonable” growth.

“A lot of economists see strong growth on the horizon,” Perry said, but some indicators temper his assessment.

“I think the labor market’s going to be a little bit tighter than what we’re used to,” he said. “We’ve seen unemployment come up a little bit. Consumers are pulling back.

“Then on the demand side, I think we’re gonna see a little bit of subdued spending. But on the supply side, I think you’re going to see a lot of Trump economic policy pushing growth forward.

“So how do I frame that properly? … I do think we’re gonna see reasonable growth, and I do think Mesa County is gonna see a positive growth year unless something nationally happens that puts us into a recession.”

Another item Perry pointed to on the positive side of the ledger is personal income per capita increased more than 4 percent, rising from $55,220 to $57,653.

“Personal income per capita has gone up pretty drastically the last 10 years in Mesa County,” he said. “If you look at the graph of it … we stagnated for a decade. Since about 2017 it’s just gone up.”

Contrarily, median household income fell, but Perry said, “I’m not too concerned about it. This is the Census; they have a small sample for Mesa County, and it’s a pretty large confidence interval, so the median-household-income estimate in 2022 was $69,578 and that fell to $66,339. But if you look at the trend of median household income, it is still going up.”

Perry said Mesa County’s median household income in 2020 was $64,000, and 2021 stayed at that mark.

“And then everything jumped in 2022,” he said. “So it wasn’t just Mesa County, but we went from 64 to 69 and then down to 66. And so I felt like that $69,000 was a little bit of an outlier, so the $66,000 is still higher than the previous two years before that. So, I’m not super concerned about a one-year reduction just because of the sample size of that.”

Perry said there is a cause for concern in the income category, but he’s inclined to think it’s an outlier: Mesa County’s poverty rate went from 10.7 percent to 11.9 percent. Perry said this is another estimate generated by the Census on a small sample size.

“They’re showing that poverty went up by almost a full percentage point,” Perry said, “and that doesn’t really jibe with some of the other data points from 2023. And so, I’m not overreacting to a one-year increase in poverty when almost all the other 2023 data points were pretty positive. … I was expecting those poverty rates to fall. They jumped. We’ll see where we’re at in a year or two.”

Interest rates have been a prevailing headline in recent years as the Federal Reserve Board has kept them high in its attempt to reduce inflation.

The Fed’s small decreases to the interest rate in the past year are likely to remain the approach, as Perry said, “Interest rates will not fall the way people are hoping. I expect interest rates to stay high for the foreseeable future.”

Meanwhile, he added, Mesa County’s real estate prices are up 6.86 percent since last year, which defy the interest rates.

Something that hasn’t been quantified with numbers but will no doubt impact the economy is the return of President-elect Donald Trump to the White House.

Perry said Trump’s promises to implement more tariffs doesn’t portend a clear outcome, especially on the local level, because the specifics remain to be seen.

“It’s hard to say what the impact of the tariffs will be, because they haven’t been negotiated or implemented,” Perry said. “Tariffs can be inflationary, but in the first Trump administration tariffs were targeted and only certain industries dealt with this.

“Tariffs can be inflationary but they can also create incentives for domestic production.”

Meanwhile, Trump stands to affect Mesa County directly when it comes to the oil and gas industry, as Perry said he promised an expansionary energy policy and a reduction of regulation in that industry.

“I do not know how this will manifest, if there will be certain federal directives that supersede state directives, I’m not sure yet,” Perry said.

Ultimately, Perry sees the president as a positive for Mesa County’s economy.

“Trump has a pro-growth agenda,” he said. “I think many economists are expecting strong GDP growth during his presidency. Mesa County is not so isolated; we follow state and national trends, so if we do see a lot of economic growth, I would expect Mesa County to follow the trend.”

That remains in line with Perry’s overall assessment.

“I think we’ll do OK this year,” he said. “Internationally we’re going to have some supply-side policies that push growth forward. I think demand is going to maybe take a step back. And so those two are going to meet somewhere in the middle, and I think ultimately it’s going to be a positive growth, and I see kind of the same thing happening for Mesa County.”

MORE ABOUT ECONOMIC OUTLOOK

THE DATA THAT DRIVES HIS OUTLOOK

Colorado Mesa professor of economics Nathan Perry said the data that helps him the most in forecasting economic trends are Gross Domestic Product, personal income per capita, median household income and then the poverty rate.

“Those are the big things that I track,” he said. “I call them standard-of-living measures.”

WAIT AND SEE FOR OIL AND GAS

President-elect Donald Trump likes to say, “Drill, baby, drill,” when speaking of his energy strategy. That resonates in Western Colorado, but Perry isn’t certain to what extent the state will see it.

“I do not know how Trump is going to try and encourage oil and gas exploration, and if it’s gonna impact Colorado, if federal laws are gonna supersede state laws in terms of regulation,” he said. “But I imagine that we’ll see some sort of impact from that, and at least on that, it’s an example of an industry that it will follow the national trends.”

EXPECT SUPPLY-SIDE GROWTH, SUBDUED SPENDING

After summarizing his 2025 expectations are for strong growth, a subdued labor market and “a little bit more subdued spending,” Perry expounded on it.

“I think a lot of the growth is gonna come on supply side,” he said. “Consumers are feeling very confident.”

However, looking at credit-card debt and savings, Perry said, “The data doesn’t look so confident. It’s kind of this weird thing going on with consumers right now, where, if you look at consumers’ confidence, it’s bumping up, but when I look at savings rates and defaults, I’m like, “Oh, boy!’

“And inflation, you can see in company earnings a lot of people are kind of trading down. Target’s earnings weren’t as good, but Walmart earnings were great. That’s a perfect example. You know, people budget, so they substitute to maybe different-quality products or different-brand products.”

THE FED GOT IT WRONG

After addressing high interest rates on Small Business Administration loans, Perry asked, “Is that doing the right thing? I mean, inflation is not that high. They’re stuck on this 2 percent target, but we might not be in a world where 2 percent inflation is possible.”

That was just the beginning of Perry taking the Federal Reserve Board to task for its approach to interest rates.

“What are we at, 2.6, 2.7 percent right now, inflation? I don’t know if that warrants the interest rates we’re at,” he said. “This is just my opinion. I don’t offer too many opinions, but I will on interest rates because it’s fairly apolitical, I think. So, if I were the Fed, I wouldn’t cut rates like crazy, but I would cut rates a little bit into 2025.

“They’re definitely in a holding pattern. I don’t think they’re gonna get their 2 percent inflation unless we have a recession, and I don’t think we want a recession for 2 percent inflation. I think the Fed is doing more harm than good, keeping interest rates high. That’s what I think.

“I think they’re hurting lower-income people more than they’re hurting higher-income people with their high-interest-rate policy, and I am for low interest rates.”